Assume the spot price of pork bellies is 75 cents per pound, the 1-year forward price is 77 cents, and the annual interest rate is 4.5%. What is the price of a zero-coupon note paying 1 pound of pork bellies in one year?
A) 77.00 cents
B) 75.00 cents
C) 72.50 cents
D) 73.61 cents
Correct Answer:
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